Corporate governance in focus

The International Finance Corporation's Vietnam Corporate Governance Programme, the Global Corporate Governance Forum, and the State Securities Commission of Vietnam organised an interactive workshop on enforcement of corporate governance in Vietnam on September 29 in HCM City.

The two-day workshop aims to provide regulators and stock-exchange staff with substantive understanding of corporate governance (CG) as a concept and as a basis for a company's strategy, mode of operation and reporting.

It will also help regulators better understand, monitor, investigate and enforce good corporate governance practices as well as improve the institutional capacity and authority for CG monitoring and enforcement.

CG is a system of principles to ensure that a company is directed and governed in an effective manner for the sake of shareholders and other stakeholders.

Companies in Vietnam have achieved a 43.5 percent score, less than half on the global scale based on the Organisation for Economic Cooperation and Development's (OECD) Principles of Corporate Governance. The OECD principles serve as an excellent reference point for international practices, said Anne Molyneux, director of CS International in the UK and former director for technical affairs at the Institute of Chartered Accountants in England and Wales.

A company with good corporate governance will be in a better position to attract external investment and increase profitability, she said.

Bui Hoang Hai, Deputy Director of the State Securities Commission of Vietnam (SSC)'s Issuance Management Department, said it is necessary to increase awareness of good governance because most State-owned enterprises have not paid much attention to it.

Listed firms in Vietnam have had many problems caused mainly by poor corporate governance, he said.

In addition, the country has adopted business law, legislation and institutions but has not been effective in protecting investors' rights and benefits.

Hai said SSC is compiling a draft circular on CG for public companies, expected to satisfy current pressing issues like non-transparency and violation of rights of shareholders, to ensure understanding and implementation and gradually improve standards of CG in Vietnam.

Speakers and participants at the workshop also discussed directors' liabilities, company and board structure for good governance, shareholder rights and responsibilities, and common violations of the rights of shareholders and other related issues.

VNA/VOV